IIA IIA-CIA-PART3 Online Practice Questions and Exam Preparation

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 1351:

  Which factor is most likely to limit expansion of a firm's productive capacity?

  A. Senior managers have production backgrounds.
  B. The firm operates in one industry.
  C. Current technology will soon be obsolete.
  D. Demand uncertainty is low.
  C. Current technology will soon be obsolete.

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  Explanation

  A firm's behavior may send signals to competitors that building is unwise. For example, it may announce an expansion project or indicate in some way that forecasts of demand are unfavorable or that current technology will soon be obsolete.

• Question 1352:

  If legal or regulatory standards prohibit conformance with certain parts of The IIA's Standards, the auditor should do which of the following?

  A. Conform with all other parts of The IIA's Standards and provide appropriate disclosures.
  B. Conform with all other parts of The IIA's Standards; there is no need to provide appropriate disclosures.
  C. Continue the engagement without conforming with the other parts of The IIA's Standards.
  D. Withdraw from the engagement.
  A. Conform with all other parts of The IIA's Standards and provide appropriate disclosures.

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  Explanation

• Question 1353:

  During an internal audit engagement, numerous deficiencies in the organization's management of customer data were discovered, entailing the risk of breaching personal data protection legislation. An improvement plan was approved by senior management.

  Which of the following conditions observed during the periodic follow-up process best justifies the chief audit executive's decision to escalate the issue to the board?

  A. The organization's customer satisfaction index does not show any signs of improvement
  B. No budget or resources have been allocated to implement corrective measures
  C. The board has not been informed about the planned improvements approved by senior management
  D. Employees responsible for improvements are resisting any additional workload
  B. No budget or resources have been allocated to implement corrective measures

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  Explanation

  According to IIA guidance, the CAE must escalate to the board when significant risks remain unaddressed. The most critical concern here is that no resources or budget were allocated to implement corrective measures. This indicates that

  management is not taking the risk seriously, and the exposure to noncompliance with data protection laws remains high.

  Option A relates to customer satisfaction, not regulatory compliance. Option C is an issue of communication but not as critical as failing to allocate resources. Option D shows resistance but can be managed if resources are in place.

  Thus, the condition that best justifies escalation is Option B: lack of allocated resources.

  IIA Standards - Standard 2600: Communicating the Acceptance of Risks.

• Question 1354:

  An organization has recently introduced total quality management TOM). Its senior management wants to determine an innovative approach to foster total participation throughout the organization. Management should:

  A. Seek isolation from all distractions in order to think the problem through.
  B. Bring the employees together for a brainstorming session.
  C. Rely on themselves to develop a new approach.
  D. Use a disciplined problem-solving approach.
  B. Bring the employees together for a brainstorming session.

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  Explanation

  Certain group decision-making processes may be more creative than individual decisions. One creative approach is brainstorming, which breaks down broadly based problems into their essentials. It is an unstructured approach that relies on the spontaneous contribution of ideas from all members of a group.

• Question 1355:

  Which of the following performance measures includes both profits and investment base?

  A. Residual income.
  B. A flexible budget.
  C. Variance analysis.
  D. A contribution margin income statement by segment.
  A. Residual income.

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  Explanation

• Question 1356:

  Which of the following would be the best indicator that the organization is saving money?

  A. No duplicate payments occurred during the past quarter.
  B. During the past quarter, 95% of invoices were paid by the due date.
  C. During the past quarter, 85% of invoices eligible for early-pay discounts were paid in time to obtain the discount.
  D. During the past quarter, 100% of payments made matched the invoiced amounts.
  C. During the past quarter, 85% of invoices eligible for early-pay discounts were paid in time to obtain the discount.

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  Explanation

• Question 1357:

  Which strategy in a global industry is most likely to be facilitated by a transnational coalition?

  A. A protected niche strategy.
  B. A national focus strategy.
  C. A national segment strategy.
  D. Broad line global competition.
  D. Broad line global competition.

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  Explanation

  Broad line global competition is competition over the full product line of the firm based on differentiation or low cost. The firm needs large resources for this long-term strategy. Governmental relations should emphasize impediment reduction. Transnational coalitions may be created to help the firms overcome impediments to executing the broader strategies, for example, market access or technology barriers.

• Question 1358:

  During a visit to an oil production plant, an internal auditor was surprised to see the accounting employees shopping online using work computers. The auditor knew that the company's policy did not allow access to certain webpages, including those being used for online shopping. Which of the following should the auditor study next to explore the observation further?

  A. The company's training policy on social media
  B. The company's firewall configuration rules
  C. The company's access point encryption settings
  D. The company's software installation controls
  B. The company's firewall configuration rules

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  Explanation

• Question 1359:

  A company's decisions are made solely by one person, who is the CEO and major shareholder. Which of the following powers is this person least likely to relate to the other individuals to whom the person has delegated some authority?

  A. Coercive power.
  B. Legitimate power.
  C. Referent power.
  D. Reward power.
  C. Referent power.

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  Explanation

  A person who is the head of a company may exert influence through five types of power. Referent power is the capacity for the individual's personality and style to cause others to identify with or like him or her. Thus, it is the one type of power not necessarily held by a CEO and major shareholder. This person has the ability to reward others and apply pressure. (S)he also has the right to expect cooperation.

• Question 1360:

  Which of the following is not a barrier to effective communication?

  A. Filtering.
  B. Communicationoverload.
  C. Similar frames of reference.
  D. Lack of source credibility.
  C. Similar frames of reference.

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  Explanation